Loans cost bank licence

Bolpur, May 18: The Reserve Bank has cancelled the licence of a cooperative bank in Birbhum that has been unable to recover loans worth about Rs 100 crore over the past three decades.

Sources said the RBI’s directive arrived at the Suri head office of the Central Cooperative Bank on Friday and the instruction to stop transactions was conveyed to its 17 branches across the district.

Nurul Islam, the chairman of the bank and president of district minority cell of Trinamul, said: “In many cases during the earlier regime, loans were granted without proper documents. This made it difficult to identify the borrowers.”

He added: “We have received the RBI’s directive to stop transactions in 17 branches till further notice.”

The bank’s 17 branches have over 1.5 lakh customers, many of whom yesterday demonstrated in front of its offices in Bolpur, Suri, Rampurhat and Nalhati.

Islam accused the erstwhile Left government of indulging in malpractice, such as giving out loans against fake documents.

The management of the bank was controlled by the Forward Bloc during the Left regime.

Asked about the allegation, district Forward Bloc secretary Dipak Chatterjee said: “Let the government carry out an investigation to identify the culprits responsible for the state of affairs at the bank. Truth will prevail.”

Chairman Islam said the bank, which is under the cooperation department, had appealed to the state government for a grant of Rs 45 crore five months ago.

“We hope to get it soon. That would help the bank to run properly. We want to assure our customers that their money is safe,” Islam said.

An official of the cooperation department said the RBI had alerted the cooperative bank in 2012 about the continuous losses it had been incurring.

“The RBI has directed the bank not to take in new customers. The accumulated loss now stands at about Rs 100 crore,” said an official of the department.

Officials said that the bank had been running at a loss since the early 1990s.